Pages

April 26, 2011

Inflation fueled by rising global oil prices

Prices in the first quarter increased an average of 3.6 percent on the
same quarter last year, driven largely by increases in international
fuel prices, according to experts.

Price inflation in Cambodia
bottomed out in late 2010, and has gradually been increasing since,
according to Olaf Unterroberdoerster, a senior economist at the
International Monetary Fund.

“However, at 3.6 percent on average
in the first quarter of 2011, inflation has been moderate compared to
Cambodia’s neighbours,” he wrote.

Vietnam’s consumer prices
climbed 17.51 percent in April from a year earlier, according to figures
released Sunday by the Hanoi-based General Statistics Office – the
highest increase since December 2008.

The IMF forecasts
Cambodia’s inflation to increase to an average of 5 percent in 2011 –
from an average 4 percent in 2010 – mainly on the back of rising fuel
prices, according to Olaf Unterroberdoerster.

“With inflation
pressures on the rise it will be important that policy makers remain
vigilant and maintain a prudent monetary and fiscal policy stance.”

Brent crude traded yesterday above US$124.30 on international markets, from below $87 one year ago.

NIS
Deputy Director General Khin Song said fuel prices were a main reason
behind the overall increase, though most prices remained relatively
stable. The NIS-compiled Consumer Price Index shows fuel prices were a
large factor in the price rise, increasing 3.08 percent on average in
the first quarter compared year on year, while prices for food and
non-alcoholic beverages increased 3.87 percent in the same period.

Other
large gains were the price of transport – up an annualised 5.04 percent
on the first quarter – and restaurants and hotels costs up 5.66
percent.

“This quarter, the speed of inflation increased a bit,
but it is not noticeable – we are on track to keep inflation under 5
percent,” said Khin Song.

Business Research Institute for
Cambodia Chief Economist Suzuki Hiroshi wrote that the Consumer Price
Index has been stable, though he added domestic prices would likely
continue increasing in the coming months.

“I notice that prices
increase a little bit [in the second quarter] – that’s seasonal,” he
said. “However, I don’t think it will be higher than five percent.”